The coronavirus pandemic is slamming the vast property empire that provides Queen Elizabeth II with a significant chunk of her income. British taxpayers could be making up the shortfall for years to come.
Michael Stevens, the Queen's treasurer, confirmed in a statement on Friday that the size of the Sovereign Grant, one of the royal family's major sources of income, won't be affected by an expected slump in profits from the Crown Estate's investments.
The Sovereign Grant is a lump sum payment from the government that covers official travel, staff costs and palace expenses. The grant is generated from the Crown Estate, a real estate company that boasts a sprawling collection of farmlands and prime central London property. Most earnings from the Crown Estate go into government coffers, but 25% are paid out by the government to the Queen in the form of the Sovereign Grant.
Last week, the Crown Estate reported a record profit of £345 million ($440.2 million) for the year to March 2020, but warned that earnings for the fiscal year to March 2021 will be "significantly down" on that amount due to the impact of the pandemic on its portfolio.
Much of central London was turned into a ghost town earlier this year as the lockdown kept millions of workers, shoppers and tourists away. Activity was beginning to pick up over the summer months but new restrictions introduced this week to combat a second wave of the virus are expected to dent that recovery.
But the Queen won't be taking a pay cut even if income falls at the Crown Estate this year. The way that the grant is calculated means that she will receive her share of £345 million — £86.3 million ($110 million) — in the year to March 2022. Her payout will also remain at that level in future years, even if the Crown Estate's profit remains under pressure, because the law governing the grant does not allow it to fall in absolute terms.
"In the event of a reduction in the Crown Estate's profits, the Sovereign Grant is set at the same level as the previous year," a Treasury spokesperson told CNN Business. "The Sovereign Grant funds the official business of the Monarchy, and does not provide a private income to any member of the royal family," the spokesperson said.